12 October 2017

Uganda: Reforms to Attract Investors in Mining Sector Under Way

Kampala — In a bid to attract new investments in Uganda's mineral sector, government has embarked on major regulatory and legal reforms for sustainable development.

To this end, a new Mining Policy 2016, is under review to emphasise policies and programmes that will increase value addition in the mining sector, both at the community level for individual mines and at the regional or national level for the sector as a whole.

According to Ms Irene Muloni, the minister of Energy and Mineral Development, the policy goal is to develop the mineral industry through increased investment, value addition, national participation and revenue generation.

"These developments are destined to contribute significantly to substantiate socio-economic transformation and poverty eradication in the country," Ms Muloni shared recently.

She added that the provisions in the policy are expected to cater for research development enhancement, local content and value addition, regulation of commercially exploited building minerals, regional and international cooperation.

"Such changes are most likely to contribute to increased revenues, export earnings, employment opportunities, infrastructure development especially in rural areas, and transfer of technology to the country," Ms Muloni said.

In order to facilitate investments in the sector, recent discoveries by the Directorate of Geological Survey and Mines (DGSM) of the ministry of Energy have provided strong evidence of significant mineral deposits and a great potential for the sector to contribute much more to the economy.

As a result, several potential areas for detailed exploration of different mineral commodities have been identified ranging from precious metals (gold, base metals, PGMs, Rare Earth Elements, Uranium and a number of industrial minerals such as limestone).

According to Mr Edwards Katto, the director DGSM, Uganda's mineral potential is very high given the existence of a variety of geological formations, many of which have yielded exploitable mineral deposits.

"The mining history of the country also testifies to this potential considering the long list of minerals which have been produced both metallic and nonmetallic," he said.

Licences

According to the Energy and Mineral Sector Performance Report FY 2016/17, as at June 30, 2017, a total of 692 licences and certificates were operational.

Out of these, the report states, there were 150 prospecting licences (PL), 374 exploration licences of which eight were for geothermal exploration, four retention licenses (RL), 49 location licenses (LL), 39 mining leases (ML), and 76 mineral dealers' licenses (MDL).

The reports further state that the value of mineral produced was Shs99 billion and Non-Tax Revenue (NTR) was Shs6.9b as compared to Shs101 billion and Shs8.7 billion for value of mineral production and NTR for F/Y 2015/16.

"Such disclosures have led to increased transparency in the mineral licensing and awareness about the mineral potential areas to both local and international investors," Mr Katto noted.

Artisanal miners

Ms Muloni said that government acknowledges the role Artisanal and Small-Scale Miners (ASM) play in the economy.

To date, more than 5,000 ASMs have been trained on issues related to environment, community, and health and safety in the mining sector, states the Energy and Mineral Sector Performance Report FY 2016/17.

"Though they are informal in nature and on the whole un-mechanised operation generally results in low productivity, the sector represents an important livelihood and income source for the poverty affected local population," Ms Muloni stressed.

However, without data, it is difficult to accurately determine how much the ASM sector plays in the economy and rural development.

The ministry believes that with better data the true story of the sector's social, environmental and economic impact can be told.

Uganda

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